1. What happens to the overall policy premium when most riders on a life insurance policy expire?
A. It stays the same
B. It goes down
C. It is refunded
D. It goes up
2. Which of the following policies must be sold by prospectus?
A. Ordinary Whole Life
B. Universal Life
C. Equity Indexed Whole Life
D.Variable Whole Life
3. M purchased a traditional permanent life insurance plan many years ago. What happens when he attains age 100?
A. M gets a check for the face amount of the policy
B. M gets a dividend check from the insurer
C. M gets a refund of all premiums paid
D. M receives nothing from the insurer because the traditional permanent insurance plan expires
4. Jerry has selected a Life Income 10 year Period Certain. What happens to the income payments if he dies in year 4 after starting to receive income benefit payments?
A. The payments are increased by 60% and paid out for the balance of the time remaining on the guaranteed benefit
B. The payments are reduced by 40% then paid out to the surviving beneficiary for the remainder of their life
C. The payments end immediately with any residual values retained by the insurer
D. The payments continue for the balance of the Period Certain to a named beneficiary
5. A universal life policy has a death benefit of $125,000 and a cash accumulation value of $15,000. Generally, what will happen to the policy if there is a $5,000 partial withdrawal?
A. The policy will immediately be voided by the insurer
B. The policy will become paid up
C. The death benefit or cash accumulation will be reduced by the partial withdrawal
D. The policy will be used as collateral for a loan from the insurer for which interest will be charged
6. In order to make sure that a creditor of the insured is not paid more than the outstanding loan at time of claim, the policyowner should:
A. Indicate the percentage of the face amount the creditor will receive
B. Specify a dollar amount the creditor should receive at time of claim
C. Purchase a decreasing benefit policy that matches the loan repayment schedule
D. Name the creditor as a primary beneficiary
7. It is the _________ who issues a Certificate of Authority enabling an insurer to conduct insurance business within a particular state.
A. Secretary of State
B. State Insurance Commissioner
C. State Congress
D. State Senate
8. All of the following are situations in which the insurer is obligated to pay out a death benefit after the insured has died, except:
A. The insurer discovers the gender of the insured was misstated
B. The premiums have not been paid and have been overdue for 3 years
C. An insured commits suicide 7 years after the policy was issued
D. The insured was an experienced pilot who died in a plane crash but had a policy issued with an aviation rider for an additional premium
9. With respect to Fraternal Benefit Societies, which of the following statements is NOT correct?
A. The regulations that apply to producers do not apply to Society producers
B. A fraternal benefit society operates for the benefit of its members and their beneficiaries
C. A Society's license is continuous unless revoked or suspended
D. A fraternal benefit society is taxed only on real estate it owns and office equipment it purchases
10. Which of the following statements is true regarding interest on life insurance proceeds?
A. Interest on the proceeds is payable from the date of death to the date of payment
B. The insurer may retain the proceeds and pay the beneficiary or policyholder respectively interest on those proceeds
C. Interest on the proceeds must be paid at the rate of 6% per annum
D. Interest on the proceeds is payable from 30 days following the date of death to the date of payment
11. Which of the following statements is true regarding the Standard Nonforfeiture Law?
A. A life insurance policy that develops, or has the potential to develop a cash value that does not contain the nonforfeiture options, cannot be delivered or issued for delivery
B. The Standard Nonforfeiture Law applies to reinsurance
C. The Standard Nonforfeiture Law applies to group insurance
D. The insurer may not defer the payment of any cash surrender value after the demand with surrender of the policy